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Indiana Statehouse

The Indiana Statehouse in Indianapolis.

INDIANAPOLIS — House Republicans are proposing the equivalent of a 3 percent annual funding increase for Indiana elementary and high school education, above both the national inflation rate and Republican Gov. Eric Holcomb's spending recommendation.

The House GOP budget, set this morning for approval by the Ways and Means Committee, grows kindergarten through 12th grade education funding by $461 million during the two-year period that begins July 1.

House Bill 1001 also allocates $150 million from the state's reserve funds to bring a teacher pension account to fully-funded status, thereby reducing the pension contributions schools must pay and freeing up another $70 million a year, every year, for local education needs.

Altogether, that means K-12 schools will see $611 million in new funding over the biennium if the proposal becomes law, and state education spending will comprise $17.3 billion out of a total proposed two-year budget of $34.6 billion, or 50 percent.

Holcomb only requested $432 million in new education funding, plus the $140 million over two years from the pension payoff, or a total of $572 million for Hoosier schools.

None of the new school funding is required to be spent on teacher pay raises. Though both House Republican leaders and the governor are urging local school district officials to strongly consider hiking what many Indiana teachers claim are stagnant wages.

The House budget also preserves the $30 million Teacher Appreciation Grants that Holcomb sought to replace with a higher state income tax credit for teachers who spend their own money on school supplies.

"We continue to strengthen our commitment to Hoosier students and educators," said state Rep. Todd Huston, R-Fishers, co-chairman of the Ways and Means Committee.

"Our conservative plan is responsibly balanced while funding key priorities and maintaining healthy reserves."

Indeed, the House GOP budget spends $63 million less than the state is projected to collect in tax revenue during the 2020 budget year, and boasts a $55 million surplus for 2021.

That would put Indiana's reserve funds at approximately $1.9 billion, or roughly 11.5 percent of annual spending, even after diverting a portion of the reserves to reduce teacher pension rates and spending $150 million to address deferred maintenance at state-owned facilities and Department of Natural Resources properties.

"Indiana ranks among the top states in the nation for its fiscal stability and that's a result of years of strong leadership," said House Speaker Brian Bosma, R-Indianapolis.

"We plan to continue this trajectory with our conservative budget proposal that's structurally balanced and protects our coveted AAA credit rating while still funding our state's critical priorities."

Specifically, the budget appropriates $286 million in additional funding for the Department of Child Services; spends $19 million, up from $14 million, on annual school safety grants; and doubles spending on the state's Workforce Ready Grants and Next Level Employer Training Grants.

In addition, it continues the $12 million in annual state support for the South Shore commuter rail double-track and West Lake projects, covers the entire $290 million projected growth in Medicaid spending and fully funds all state college scholarship programs.

Other budget highlights include $10 million to the secretary of state for election security fixes; $42 million to the Department of Revenue for ongoing tax technology upgrades; and the creation of a revolving loan fund that ultimately may support $2.1 billion in local water infrastructure improvements, a program championed in House Bill 1406 by state Rep. Ed Soliday, R-Valparaiso.

At the same time, the House Republican budget, like the governor's plan, eliminates the $3 million in annual funding for the Hoosier State Amtrak line that runs four days a week between Indianapolis and Chicago, with a stop at Dyer.

Following Ways and Means Committee approval, the budget legislation likely will be eligible Thursday for any of the 100 representatives to propose additions, deletions or other revisions.

The House then is expected to vote Monday on advancing its budget to the Republican-controlled Senate, which will evaluate the measure and by mid-April approve its own state spending plan.

Between roughly April 15 and April 29, negotiators from the House, Senate and the governor's office will hammer out a compromise two-year state budget that must again be ratified by both chambers to be signed into law.

"We look forward to working with our House and Senate colleagues, and Governor Holcomb as we move forward," Bosma said.

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